Strategy 2015+: Our journey - Deutsche Bank€¦ · Agenda 1 The environment 2 Our journey 3 The...

Deutsche Bank

Strategy 2015+: Our journey

Anshu JainCo-Chief Executive Officer, Deutsche Bank

BoAML Banking & Insurance CEO ConferenceLondon, 25 September 2013

Anshu Jain, BoAML Banking & Insurance CEO Conference25 September 2013

Deutsche Bank financial transparency.

We are 16 months into our three year journey

Progress on controllables

Capital Reached 10% Basel 3 common equity tier 1 ratioCap a

Cost

Competencies

eac ed 0% ase 3 co o equ y e a o

Adjusted cost base reduced by EUR 600 m yoy(1)

Strengthened 1H2013 results across divisionsp

Clients

Culture

g

Progressed in delivering ‘One Bank’ to our clients

Launched new values and beliefs

Macro/ Markets Macro/market environment has mostly improved

Changes in uncontrollables

Litigation

Regulation

Markets

Regulation has further intensified

Industry-wide issues with larger impact


Deutsche Bank financial transparency. 1

(1) 1H2013 vs. 1H2012

Agenda

1 The environment

Our journey2

The dividend3 The dividend3



Macro/markets: In the past year, the macroeconomic and market environment has mostly improved

Jun-12 Sep-13

market environment has mostly improvedKey developments since June 2012 Recovery momentum today vs. June 2012

p

Germany

Containment of Euro crisis

Europe

US

Fed tapering

Japan

Chi

US recovery

China

Other EM EM volatility



Source: DB Research Negative Neutral Positive

Intensified regulatory environment in the last year

B k l ti B k t t fEU compensation

lForeign bank rules in th USBank leverage ratio

Leverage as key

Bank structure reform rules

Proposal for stricter

the US

Proposal for enhanced regulatory metric

agreed, uncertainty around final definition,

in particular across

Multiple proposals for separating some

trading activities from deposit taking

compensation practices, in particular

targeting a better mix of fixed and

regulatory requirements, in

particular affecting capitalization, for p

regionsp g

variable payp ,

foreign banks



Agenda

1 The environment

Our journey2




Solid performance in 1H2013In EUR bn, unless otherwise statedIn EUR bn, unless otherwise stated

Group Core Bank(1)

1H2013 1H2012 1H2013 1H2012

P f

Net revenues 17.6 17.2 17.0 16.6Total noninterest expenses 13.6 13.6 12.3 12.5

M dj t d t b (2) 11 9 12 5Performancehighlights

Memo: adjusted cost base(2) 11.9 12.5 - -Income before income taxes 3.2 2.9 4.1 3.6Net income 2.0 2.1 2.6 2.6Post-tax return on average active equity 7.3% 7.5% 11.8% 12.1%Post tax return on average active equity 7.3% 7.5% 11.8% 12.1%

CapitalCommon equity tier 1 ratio (Basel 2.5) 13.3% 10.2% - -Common equity tier 1 ratio (Basel 3)(3) 10.0% <6.0% - -

Note for the whole document: Basel 3 / B3 represents CRR/CRD4 if not stated otherwise



Note for the whole document: Basel 3 / B3 represents CRR/CRD4 if not stated otherwise Note: Figures are pro-forma and on a fully loaded basis; numbers may not add up due to rounding(1) Core Bank includes CB&S, GTB, DeAWM, PBC and C&A (2) Adjusted for non-underlying items, CtA and litigations (3) 1H2013 pro-forma Basel 3 Capital ratio (fully loaded); capital is allocated based on Economic Capital (inline with methodology to derive Basel 2.5 ratio for current and prior quarters)

Capital: Our common equity tier 1 ratio is in line with peers but focus has shifted to leveragebut focus has shifted to leverageBasel 3 common equity tier 1 ratioPro-forma (fully-loaded) as of 30 June 2013, in %

New regulatory leverage ratioReported leverage ratio(1), as of 30 June 2013, in %

10.0

10.4

11.2

4.8

4.9

5.0

9.6

9.9

10.0

3.8

4.2

4.7

US

9.3

9.3

9.4

3.0

3.0

3.0 USpeer Ø: 4.7

9.3

9.3(1)

Peer Ø: 9.8

2.7

2.9

Europeanpeer Ø: 3.1



(1) US banks based on Fed NPR rules, EU banks based on CRD4, Swiss banks based on SRB rules. Capital / numerator includes current eligible AT1 outstanding (under phase-in); assuming new eligible AT1 will be issued as this phases out. Including impact from announced capital increase, where applicable Source: Company data, DB Research where not available

Capital: Why do EU banks have structurally lower leverage?In %, as of 30 June 2013 except loan loss ratioIn %, as of 30 June 2013 except loan loss ratio

(1)

Lower RWA density of European banks… …reflect lower loan losses

(1)

5.6

4.9

5.6

4.9

Reported leverage ratio(1)Reported leverage ratio(1)

US banks

4.2

3.5

4.2

3.5European

banks

US banksUS banks

European banks

2.8

0

2.8

0

banks

400350300250200150100500

B3 RWA density on exposure(1)

555045403530252015

Average loan loss ratio 2008-2012(2)

(1) US banks based on Fed NPR rules EU banks based on CRD4 Swiss banks based on SRB rules Capital / numerator includes current eligible AT1 outstanding (under phase-in); assuming new


Deutsche Bank financial transparency.

(1) US banks based on Fed NPR rules, EU banks based on CRD4, Swiss banks based on SRB rules. Capital / numerator includes current eligible AT1 outstanding (under phase in); assuming new eligible AT1 will be issued as this phases out. Including impact from announced capital increase, where applicable (2) Credit loss provisions divided by gross loan book, average for 2008 -2012. Deutsche Bank’s 2010 ratio adjusted to reflect 12 months of Postbank provisions, 2011 and 2012 provisions include releases from Postbank shown as other interest incomeSource: Company data, DB Research where not available

8

Capital: We have decided to reduce EUR 250 bn of exposure to create a buffer to expected European standardsexposure to create a buffer to expected European standardsCRD4 leverage exposure Leverage toolboxIn EUR bn

CRD4 gross-up measures

Clearing house netting Tear-ups / trade compression Review of unutilized lending

commitmentsCRD4 gross-up

1,583

413

EUR 120 –170 bn

NCOU de-risking Optimization of collateral

managementTAA70Derivatives

Other

Non-derivativetrading assets

157

237

~ EUR 250 bn reduction at manageable EUR 80management

Review of trading inventory level Review of cash and liquidity pool Portfolio measures

TAA measures

Cash & deposits with banks

Reverse repo / securities borrowed

Lending

117

201

388

gIBIT impact EUR 80 –

130 bn

Capital measures

AT1 issuance Common equity tier 1 capital accretion

Cash & deposits with banks

CRD4 exposure117



Note: Numbers may not add up due to rounding

Costs: OpEx program is on track

In EUR bn In EUR bn

Targeted cost-to-achieve and savings Program to date progress

Cumulative savingsCost-to-achieve per year 1H20132H2012

4.5

4.0

4.5

Invested/achieved

2014 target

2014 target

2.9

1.1 1.12013 target

2013 target

1.51.7 1.6

0.4

Cumulative

0.7

Cumulative

0.5

0.61H2013 1H2013

2H2012 2H20120.2

0.60.4

2015201420132012



Note: Numbers may not add up due to rounding

Cumulativesavings

Cumulative cost-to-achieve

2015201420132012

CB&S: Focused on doing more with lessAs of 30 June 2013As of 30 June 2013

Example challenges Business response

Macro – emerging three-speed-world

Franchise

+38%Debt and equity origination(1)

+30%Sales & Trading Equities(1)

Regulatory pressure

resilience

Sales & Trading Debt(1) (13)%

+30%Sales & Trading Equities(1)

Lower industry volumes

R lib ti f(12)%Front-office full-time equivalents(2)

Increased public scrutiny

Recalibration of platform

(19)%Basel 2.5 risk-weighted assets(2)



(1) Revenues; 1H2013 vs. 1H2012 (2) 30 June 2013 vs. 30 June 2012

PBC: Delivering record profitability while integratingAs of 30 June 2013As of 30 June 2013


(1)

Adapting to the

+4%Credit products(1)

+7%Investment / insurance products(1)

Persistently low interest rate environment

Adapting to the environment

(5)%Deposits / payment services(1)Continued risk aversion among

(19)%Credit loss provisions(2)

EUR ~450 mPostbank integration synergies(3)

retail clients

Complex large-Streamlining our platform

OpEx savings to come(4) EUR ~1 bn

EUR 450 mPostbank integration synergiesComplex, largescale integration and significant cost reduction



(1) Revenues; 1H2013 vs. 1H2012 (2) 1H2013 vs. 1H2012 (3) FY2012; includes revenue and cost synergies (4) 30 June 2013 to 2015

GTB: Solid performance despite headwindsAs of 30 June 2013As of 30 June 2013


R (1) 2%

Solid performance and strong cost di i li

Revenues(1) +2%

Persistently low interest rate

i t(6)%Non-interest expenses(1)

discipline

22%Return on equity(2)

environment

Continued positive Continued margin

+2.4 pptRevenue growth vs. peer average(1)

+11%Delivering in the Americas(3)momentum vs. peers

compression

(4)%Increased competition in APAC(3)

11%Delivering in the Americas



(1) 1H2013 vs. 1H2012 (2) Post-tax; 1H2013 (3) Revenues; 1H2013 vs. 1H2012

DeAWM: Cutting, merging, and growingAs of 30 June 2013As of 30 June 2013


(1)

Improving our offering to clients +7%Revenues(2)

Complex business integration

EUR 6 bnNet new money(1)

g

Gap in revenue margin to top 3 peers(1)

Elimination of platform duplication

~50 bps

Increasing

(9)%Front-office full-time equivalents(3)platform duplication

Bifurcation of alpha +60%Income before income taxes excl. ( )platform efficiency

78%Cost / income ratio excl. cost-to-achieve(1)

Bifurcation of alpha and beta products and margin pressure

+60%cost-to-achieve(2)



(1) 1H2013 (2) 1H2013 vs. 1H2012 (3) 30 June 2013 vs. 30 June 2012

NCOU: Addition through subtractionAs of 30 June 2013As of 30 June 2013


(1)

Uncertain financial markets Significant

de-risking

EUR (46) bnAdjusted assets(1)

EUR (61) bnBasel 3 risk weighted assets(1)

Industrial/operating assets for disposal

g

+84 bps(2)Basel 3 common equity tier 1 ratio generation(1)

assets for disposal

Resolution of

+14%Credit loss provisions(3)

27%Operational risk as % of risk-( )

Longer-term effect of legacy positions

legacy issues 27%weighted assets(4)

25%Market risk as % of risk-weighted assets(4)



(1) 30 June 2013 vs. 30 June 2012 (2) ~108 bps common equity tier 1 ratio generation excluding litigation charges (3) 1H2013 vs. 1H2012 (4) 30 June 2013

Clients: Improved client proximity and cross-divisional collaborationcollaborationExample Germany

Strengthened footprint in Germany Key initiatives

Integrated commercial banking coverage for ~900,000 small- and mid-sized corporate clients (Mittelstand), ~11,500 of

EastNorth

Hamburg

Regional hub

Key locations

Existing locationsfor mid-sized corporate clients

which transferred to PBC

Provide commercial banking clients access to 180 additional advisory centers and global product expertise

West Berlin

Düsseldorf

New locations for mid-sizedcorporate clients

global product expertise

Offer better local coverage possibilities to ~1,400 CB&S large corporate clients

St th d i l dCentral

SouthFrankfurt

Strengthened regional presence andconnectivity by appointing 5 regional heads

CentralMunich



Culture: We launched our new values and beliefs

Integrity Client Centricity

Innovation Discipline PartnershipOur values

Sustainable Performance

We live by the highest standards of integrity in everything we say

Centricity

We earn our clients’ trust by placing them at the core of our organization

We foster innovation by valuing intellectual curiosity in our

We protect the firm’s resources by always thinking and acting like owners

We build diverse teams to generate better ideas and reach more

Our beliefsPerformance

We drive value for shareholders by putting long term success over shorteverything we say

and do

We will do what is right – not just what is allowed

our organization

We deliver true value by understanding and

curiosity in our people

We enable our clients’ success by constantly seeking

acting like owners

We live by the rules and hold ourselves accountable to

reach more balanced decisions

We put the common goals of the firm before ‘silo’ loyalty

success over short term gain

We encourage entrepreneurial spirit which responsibly

W i t

gserving our clients’ needs best

W t i t

y gsuitable solutions to their problems

W ti l

deliver on our promises – no excuses

W hi

y yby trusting, respecting and working with each other

W t

p ybalances risks and returns

W l tiWe communicate openly; we invite, provide and respect challenging views

We strive to pursue mutually beneficial client relationships in which the value created is shared fairly

We continuously improve our processes and platforms by embracing new and better ways of doing

We achieve operational excellence by striving to ‘get it right the first time’

We act as responsible partners with all our stakeholders and regulators, and in serving the wider

We pursue lasting performance by developing, nurturing and investing in the best talent, and by managing based on



fairly better ways of doing things

serving the wider interests of society

managing based on merit

Agenda

1 The environment

Our journey2




By 2015 Deutsche Bank will emerge as one of a handful of strong global universal banksstrong global universal banks…

…with institutions grouping around three key modelsClear evidence of consolidation...

Number of banks(1)High standing in their

(17)%~6,200~7,300

Regionally focused banks

― High standing in their communities and among regulators and public officials

― Avoidance of rising cost of global complexity

Today2007Global

monolines

global complexity

― Scale to capture opportunities arising from global trends

Lack of diversification can leadN b f b k monolines ― Lack of diversification can lead to earnings volatility

― Broad range of products and services

Number of banks

(18)%

~7,000~8,500

Global universal banks ― Lower costs for customers and

the real economy

― Greater financial stabilityDeutsche Bank

Today2007



(1) Based on ECB Monetary Financial Institutions (MFI) data for Belgium, Germany, Greece, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland Source: ECB, Fed

Deutsche Bank

…who are positioned to capture opportunities from future trendstrends

Aging populationsEmerging markets growthUrban population in China and India, in bn Number of >65yr old people, in bn

Disruptive financial technology

Share of online vs. traditional bank users in the US 2013

~1.0

the US, 2013

>70%~2.0

2050Today

~0.5

Branch

<30%

Online2050Today

~1.0

Invest in differentiation and

2050Today

Adopt to winning technology

BranchOnline2050Today

footprint to tailor services to unique needs of EM clients

Extend product lines Adopt to winning technology and harvest “e-tailing” growth



Source: OECD, UNDP, DB Research

Strategy 2015+: Committed to delivery

The most ambitious and comprehensive reconfiguration of Deutsche Bankin recent timesin recent times

Market developments and underlying business performance validate Strategy 2015+Strategy 2015

Progress achieved on capital and risk reduction, but leverage is a challenge

Near-term measures implemented to lay basis for sustainable cultural change

The leadership team is united in continuing on the path of change and committed to the strategic direction taken



the strategic direction taken

Cautionary statements

This presentation contains forward-looking statements. Forward-looking statements are statements that are not historicalfacts; they include statements about our beliefs and expectations and the assumptions underlying them. These; y p p y gstatements are based on plans, estimates and projections as they are currently available to the management of DeutscheBank. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation toupdate publicly any of them in light of new information or future events.

By their very nature forward-looking statements involve risks and uncertainties A number of important factors couldBy their very nature, forward-looking statements involve risks and uncertainties. A number of important factors couldtherefore cause actual results to differ materially from those contained in any forward-looking statement. Such factorsinclude the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which wederive a substantial portion of our revenues and in which we hold a substantial portion of our assets, the development ofasset prices and market volatility, potential defaults of borrowers or trading counterparties, the implementation of ourp y p g p pstrategic initiatives, the reliability of our risk management policies, procedures and methods, and other risks referenced inour filings with the U.S. Securities and Exchange Commission. Such factors are described in detail in our SEC Form20-F of 15 April 2013 under the heading “Risk Factors.” Copies of this document are readily available upon request orcan be downloaded from www.db.com/ir.

This presentation also contains non-IFRS financial measures. For a reconciliation to directly comparable figures reportedunder IFRS, to the extent such reconciliation is not provided in this presentation, refer to the 2Q2013 Financial DataSupplement of 30 July 2013 available at www.db.com/ir.



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